## The Secrets of Day Trading Stocks: Understanding T+0 Intraday Trading

In the Taiwan stock market, T+0 intraday trading (day trading) has become a daily operation for many investors. Simply put, **intraday trading means completing both buy and sell transactions within the same day to profit from price differences**. Unlike the traditional T+2 settlement system that requires waiting two days to access funds, intraday trading can settle on the same day, freeing many investors from overnight holding risks.

Since Taiwan stocks opened to intraday trading in 2014, nearly 40% of market trading volume has come from intraday trades, and participation has increased year by year. The reason is straightforward: investors can leverage intraday volatility to quickly profit while avoiding systemic overnight risks.

## How Intraday Trading Works: The Application of Margin and Securities Lending

Many people wonder, since Taiwan stocks operate under a T+2 system, how can T+0 trading be possible? **The answer lies in broker-dealer margin and securities lending services**.

When you decide to buy and sell the same stock on the same day, you are essentially using the broker as an intermediary. For example, you might buy 100 shares of TSMC at 9:15 AM and sell those 100 shares at 2:30 PM, completing a buy-sell cycle. Although your stock holdings haven't changed, the broker charges financing and securities lending fees along with transaction fees, and you achieve the goal of same-day trading.

## Spot Stock Intraday Trading vs Margin & Securities Lending Intraday Trading: Two Operational Paths

### Spot Stock Intraday Trading: The simplest same-day trading method

**Spot stock intraday trading** mainly relies on your own funds for same-day transactions, making the operation relatively straightforward.

**Trading directions:**
- Bullish: Buy spot stocks during the day → Sell spot stocks (long position)
- Bearish: Sell spot stocks during the day → Buy spot stocks (short position)

**Account opening conditions:**
- Broker account held for more than 3 months
- At least 10 buy/sell transactions in the past year
- Signed risk disclosure and intraday offset agreement

**Fee structure:**
- Securities transaction tax: 0.15%
- Transaction fee (buy/sell): 0.1425%

### Margin & Securities Lending Intraday Trading: Leveraged advanced strategy

**Margin & securities lending intraday trading** involves borrowing money or stocks from the broker to amplify trading scale, but at higher costs.

**Trading directions:**
- Bullish: Margin buy during the day → Securities lend sell (long position)
- Bearish: Securities lend sell during the day → Margin buy (short position)

**Account opening conditions:**
- Broker account held for more than 3 months
- At least 10 buy/sell transactions in the past year
- Transaction amount over NT$250,000 in the past year
- Need to open a credit account

**Fee structure:**
- Securities transaction tax: 0.3%
- Transaction fee (buy/sell): 0.1425%
- Loan interest rate (average): 0.08%

## Practical Advantages of Intraday Trading

**Rapid stop-loss, reducing risk exposure**
Positions can be closed within the same day, avoiding the risk of misjudging the market and having to wait until the next day to sell. This significantly reduces losses for quick-reacting investors.

**Near-zero capital requirement trading**
Compared to traditional stock trading that settles after two days, intraday trading follows a buy-and-sell settlement rule, resulting in high capital turnover efficiency and attracting small-capital investors.

**Avoiding uncontrollable overnight holding factors**
Market-moving news, gaps, and unexpected overnight events can cause large price swings. Intraday traders don't need to worry about these risks.

## Pitfalls of Intraday Trading

**Excessive leverage is the biggest killer**
Many investors are attracted by the concept of "no-capital intraday trading," but in reality, it involves financial leverage. Wrong market direction judgments can magnify losses, and a single mistake can lead to huge debts. Investors with insufficient funds are often the least able to bear risks; forced liquidation can have serious consequences.

**Costs erode profits**
Transaction taxes, fees, and interest costs add up and are not negligible. If your trading profits are slim, these costs can wipe out your gains or even cause losses.

**Time-consuming and high-pressure**
Intraday trading requires monitoring the market all day, paying attention to individual stock movements, overall market trends, news, and order book changes. The psychological pressure and time investment far exceed those of swing trading.

**Cannot intraday trade fractional shares**
If you only hold fractional shares, you cannot engage in margin trading either during or after trading hours; the fastest you can sell is the next day. This imposes practical restrictions on small investors.

## Comparing Other T+0 Trading Tools

Besides stock margin and securities lending, the market offers various financial products that inherently support T+0 trading.

### Futures Trading
Futures are inherently T+0 instruments, allowing buying and selling on the same day. The main features are leverage and two-way trading. About 96% of futures market participants are speculators.

**Account opening requirements:** Usually require tens of thousands of dollars in margin

**Trading costs:** 0.02% transaction tax + approximately NT$30 commission

### Options Trading
Options are derivatives based on futures, giving holders the right (but not obligation) to buy or sell at a specified price within a certain period. The key difference from futures is that contract execution is optional; the right is held by the buyer.

**Account opening requirements:** Only a few thousand NT$ in premium

**Trading costs:** 0.1% transaction tax + a few dozen NT$ in commissions

### Contracts for Difference (CFD)
CFD is an over-the-counter derivative where investors enter into contracts with brokers to profit from price differences. Underlying assets include forex, precious metals, stock indices, individual stocks, oil, and even virtual currencies.

**Account opening requirements:** Very low threshold, from tens to hundreds of USD

**Trading costs:** Mainly spreads

## Overview Comparison of Intraday Trading Tools

| Comparison Dimension | Margin & Securities Lending | Spot Stock Intraday | Futures Trading | Options Trading | CFD Trading |
|------------------------|------------------------------|---------------------|-----------------|----------------|--------------|
| **Trading Nature** | Margin financing & securities lending | Margin & securities lending | Inherently T+0 | Inherently T+0 | Inherently T+0 |
| **Account Opening** | 3+ months + 10+ transactions + NT$250,000+ credit account | 3+ months + 10+ transactions + risk acknowledgment | Tens of thousands in margin | Thousands in premium | Tens to hundreds USD |
| **Trading Costs** | 0.3% tax + 0.1425% fee + 0.08% interest | 0.15% tax + 0.1425% fee | 0.02% tax + NT$30 fee | 0.1% tax + dozens of NT$ fee | Spread |
| **Main Risks** | Leverage risk, long-term holding risk | Inability to settle intraday, market volatility | Leverage risk | Leverage risk | Leverage risk |

## Practical Process for Stock Intraday Trading

The trading logic is straightforward: **buy first and sell later if bullish; sell first and buy later if bearish**. Different tools have their own trading rules and fee structures.

**Step 1:** Assess market direction, analyze technical and fundamental factors

**Step 2:** Choose suitable trading tools and platforms

**Step 3:** Confirm price movements during the day, then place orders

**Step 4:** For long positions: click buy → close position within the day by selling
For short positions: click sell → close position within the day by buying

**Step 5:** Always set stop-loss prices to control individual trade risks

## Quick FAQs

**Q: Can fractional shares participate in intraday trading?**
A: No. Fractional shares do not support any margin or securities lending, and can only be sold the next day at the earliest.

**Q: Which stocks support intraday trading?**
A: In Taiwan, stocks eligible for intraday trading include Taiwan 50 Index components, Mid-Cap 100 Index components, and Fubon FTSE Taiwan 50 Index components, totaling about 200 stocks. In the US, regular accounts can trade up to 3 times within 5 trading days, but accounts with over $25,000 USD assets have no limit.

**Q: What are the best times for intraday trading?**
A: The first 30 minutes after market open, the last hour before close, and during periods of significant news are the most volatile and ideal for intraday trading.

## Summary

Same-day stock trading is suitable for investors with quick reaction skills and strong risk management awareness. It settles within the same day, with relatively low costs, but requires sufficient funds, a stable mindset, and sharp judgment. Improper leverage use or poor risk control can easily lead to losses or even default.

Choosing between intraday trading and swing trading should be based on your time availability, risk tolerance, and trading skills. Blindly following the trend into intraday trading may instead lead to rapid losses.